Netflix price target raised to $400 from $325 at Wedbush

Wedbush analyst Michael Pachter raised the firm’s price target on Netflix to $400 from $325 and keeps an Outperform rating on the shares. The analyst thinks Netflix is well-positioned in this murky environment as streamers are shifting strategy, and should be valued as an immensely profitable, slow-growth company. Further, Pachter believes Netflix made a great decision to launch an ad-tier, as growth had stalled in UCAN and was heading toward full market saturation in EMEA. Its ad-tier should limit churn going forward, while its content strategy appears to be smoothing out with greater discernment and a higher mix of original titles, he adds. The analyst also thinks Netflix is poised for significant free cash flow growth in the coming years. Consensus expects Netflix to miss its Q4 subscriber guidance, while Pachter expects the company to exceed guidance, as its ad-tier should limit churn while its content drove viewership in line with Q4 2021.